Indonesia Bans E-Commerce On Social Media, Drawing TikTok's Displeasure

Indonesia has imposed a ban on e-commerce transactions conducted on social media platforms, according to the trade minister's announcement, dealing a blow to the short video app TikTok.

Indonesian influencer Syifa Aulia Putri has a solid following on TikTok. I Photo: PositiVibe Entertainment

The aforementioned has been intensifying its focus on Southeast Asia's largest economy to bolster its e-commerce ventures, as reported by Dewei Kurniawati and Stanley Widianto for Reuters.

The government has implemented this immediate move to safeguard traditional offline merchants and marketplaces, citing predatory pricing on social media platforms as a threat to small and medium-sized enterprises.

This decision comes just three months after TikTok pledged to invest billions of dollars in Southeast Asia, particularly in Indonesia, as part of a significant effort to build its e-commerce platform, TikTok Shop, as reported by Stefanno Sulaiman, Fransiska Nangoy, and Johan Purnomo for Reuters.

TikTok, owned by China's ByteDance, boasts 125 million active users in Indonesia and has been aiming to convert this substantial user base into a significant revenue source.

A spokesperson for TikTok Indonesia expressed concerns about this announcement and stated that the company would seek a constructive way forward. TikTok also highlighted the potential impact on the livelihoods of the 6 million local sellers on TikTok Shop.

Indonesia's Trade Minister, Zulkifli Hasan, stated that the regulation aims to ensure "fair and just" competition and also intends to safeguard user data protection.

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